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PHOENIX-The third time proved to be the charm for Hines as its US Core Office Fund LP closed on the 965,508-sf One and Two Renaissance Square. The Houston-based buyer has snagged the CBD trophy, straddling a full city block, from the Pauls Corp. and GE Asset Management for $270.9 million, and plans to hold it long term.

Word about Hines’ contract for the Downtown trophy leaked out in mid-December. According to William Olson, vice president with Hines’ Arizona development office, the company had made runs at the 492,116-sf One Renaissance Square at 2 N. Central Ave. and the 473,392-sf Two Renaissance Square at 40 N. Central Ave. when they were separately marketed in 2005 and before that. This time, he says the offering was particularly attractive because it provided control of both CBD buildings.

“It’s always a great opportunity when you have buildings like this with quality tenants,” Olson says. “They’ve seen different ownership teams and I think when they see one that’s going to be there for awhile, it helps them feel more comfortable.”

Olson tells GlobeSt.com that the 95%-leased rosters will stay fairly stable for a couple years, with 3% of the leases rolling in 2008 and a 10% roll in the following year and into 2010. “There will be some tenant turnover. We were aware of this during the due diligence process,” he adds. “But, those will create some new leasing opportunities and the ability to bring up some of that space to market rental rates. We think that, based on the interview with the tenants, they’re pleased with the buildings.”

Hines is planning to upgrade the structures in two to three years, mainly to address issues that Olson explains are typical of buildings that have been around for 20 years. Hines will be the property and asset manager. He says interview will be held in the coming months for the leasing assignment.

Pauls Corp. of Denver, which was represented by New York City-based Eastdil Secured’s Los Angeles office, acquired the two buildings when they were separately marketed in 2005. One Renaissance was bought from Maguire Properties of Los Angeles, which owned the building just a few months. Two Renaissance came to Pauls via Crescent Real Estate Equities Co.

Although Hines is active in Phoenix as a developer and investor, the Renaissance Square buy won’t be followed immediately by a slew of others. Olson acknowledges that, while Hines examined about a dozen different assets in Phoenix during the past four years, the company is taking a wait-and-see approach these days due to current capital market fluctuations.

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